Bloomberg News

Debt-Limit Compromise Plan to Save $2.1 Trillion, CBO Says

August 01, 2011

(Updates with details from report in second paragraph.)

Aug. 1 (Bloomberg) -- A compromise U.S. deficit-reduction plan announced last night would save $2.1 trillion over the next 10 years, according to the nonpartisan Congressional Budget Office. The number is in line with lawmakers’ spending-cut goals.

The savings would come in two rounds, with $917 billion in cuts to so-called discretionary spending, the agency said. A special committee would be charged with finding another $1.5 trillion in cuts, though if it failed to act, there would be automatic cuts totaling $1.2 trillion. The CBO used the latter figure in its estimate because those cuts would be guaranteed.

The agreement reached yesterday is designed to clear the way for an increase in the government’s $14.3 trillion debt limit that the Treasury Department says is needed by tomorrow.

--Editors: Laurie Asseo, Mark McQuillan.

To contact the reporter on this story: Brian Faler in Washington at bfaler@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net


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